Difference between revisions of "5% solution"
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| − | Step 2: Add additional categories with "Pick Your Own" | + | === Step 2: Add additional categories with "Pick Your Own" category cards === |
| − | Several credit cards let you choose from a set of bonus categories. By getting multiple of these cards, you can add additional categories above and beyond the "normal" categories listed above. | + | Several credit cards let you choose from a set of bonus categories. By getting multiple of these cards, you can add additional categories above and beyond the "normal" categories listed above. |
The '''{{Card|CashPlus|only}}''' earns 5% on two categories of your choice, with a $2,000 cap on bonus category spending per quarter. The '''{{Card|Vantage|only}}''' earns 5% in a single category of your choice, with a $1,500 cap on bonus category spending per quarter. You can change your bonus category for these cards every quarter. | The '''{{Card|CashPlus|only}}''' earns 5% on two categories of your choice, with a $2,000 cap on bonus category spending per quarter. The '''{{Card|Vantage|only}}''' earns 5% in a single category of your choice, with a $1,500 cap on bonus category spending per quarter. You can change your bonus category for these cards every quarter. | ||
| − | If you can move $100,000 in retirement or investment assets to Merrill Lynch, you'll qualify for Bank of America's Platinum Honors status and will receive a 75% bonus on credit card rewards. This turns the '''{{Card|BOACash|only}}''' into a card that earns 5.25% on a category of your choice, that you can change monthly. You are capped at $2,500 in bonus category spending each quarter. | + | If you can move $100,000 in retirement or investment assets to Merrill Lynch, you'll qualify for Bank of America's Platinum Honors status and will receive a 75% bonus on credit card rewards. This turns the '''{{Card|BOACash|only}}''' into a card that earns 5.25% on a category of your choice, that you can change monthly. You are capped at $2,500 in bonus category spending each quarter. |
| + | Examples of extra categories include "online shopping", "home improvements and furnishings", "home utilities", "department stores", "gym/fitness centers", "select clothing stores", "charitable organizations", and "drugstores". | ||
| + | You can also try to leverage "rotating category" cards. Like pick your own category cards, these cards sometimes cover more unusual categories and there is a quarterly bonus rewards spending cap. But instead of getting to choose your own bonus categories, the credit card company decides the bonus categories for each quarter. {{Link|rotating categories}}. | ||
=== Step 3: Use the Altitude Reserve when it make sense === | === Step 3: Use the Altitude Reserve when it make sense === | ||
Revision as of 18:39, 15 January 2019
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While it takes a lot of work, you can earn 4-5% or more on all your credit card spending.
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Step 1: Use cards with high bonus category reward rates
The easier part of the strategy is simply to take advantage of cards that have high reward rates for various bonus categories. Your choices depend on how highly you value Ultimate Reward points, other transferable reward points, or straight cash back; and whether you are willing and able to take advantage of business cards.
For the "standard approach", we value Ultimate Reward points at 1.7 cents each; and Membership Reward and ThankYou points at 1 cent each. For the "miles" approach, we try to maximize the number of transferable points we earn, with a slight preference for Membership Reward points. For the "cash" approach, we only consider options where get actual cash back, or can use your points to make or offset travel purchases. In that case, we value Ultimate Reward points at 1.5 cents each.
| Category | Standard | Miles | Cash |
|---|---|---|---|
| Dining | 5.1% w/Chase Sapphire Reserve ($150) | 5x w/Citi Prestige ($245) or 4x w/Amex Gold ($140 US Only) | 4% w/Uber ($0), 5% w/Citi Prestige ($245), 4.5% w/Chase Sapphire Reserve ($150), 4.5% Wells Fargo Propel ($0) |
| Airfare | 5.1% w/Chase Sapphire Reserve | 5x w/Citi Prestige or 5x w/Amex Platinum Card ($350) | 4.5% w/US Bank Altitude Reserve ($75), 4.5% w/Wells Fargo Propel ($0), 4.5% w/Chase Sapphire Reserve |
| Other Travel | 5.1% w/Chase Sapphire Reserve | 3x w/Chase Sapphire Reserve, 3x w/Citi Premier ($95), 3x w/Citi Prestige (Hotels and cruises only) | 4.5% w/Chase Sapphire Reserve, US Bank Altitude Reserve, or Wells Fargo Propel, 3% w/Uber |
| Groceries | 6% w/Amex Blue Cash Preferred ($95) | 4.5x w/Amex Everyday Preferred ($95), 4x w/Amex Gold ($250) | 6% w/Amex Blue Cash Preferred ($95) |
| Gas | 5% w/Ducks Unlimited ($0) | ||
| Amazon Purchases | 5% w/ Amex (Biz) or Chase (personal) Amazon Prime card ($0) | ||
| Target Purchases | 5% with Target Debit Card ($0) | ||
| Office Supplies and Telecom Services | 8.5% w/Ink Cash (Biz, $0) | 5x w/Ink Cash | 7.5% w/Ink Cash, 5% w/Amex SimplyCash Business (Biz, $0) |
| Sporting Goods | 5% w/Ducks Unlimited ($0) | ||
Step 2: Add additional categories with "Pick Your Own" category cards
Several credit cards let you choose from a set of bonus categories. By getting multiple of these cards, you can add additional categories above and beyond the "normal" categories listed above.
The U.S. Bank Cash+ Card earns 5% on two categories of your choice, with a $2,000 cap on bonus category spending per quarter. The VantageWest Connect Credit Card earns 5% in a single category of your choice, with a $1,500 cap on bonus category spending per quarter. You can change your bonus category for these cards every quarter.
If you can move $100,000 in retirement or investment assets to Merrill Lynch, you'll qualify for Bank of America's Platinum Honors status and will receive a 75% bonus on credit card rewards. This turns the BOA Cash Rewards Card into a card that earns 5.25% on a category of your choice, that you can change monthly. You are capped at $2,500 in bonus category spending each quarter.
Examples of extra categories include "online shopping", "home improvements and furnishings", "home utilities", "department stores", "gym/fitness centers", "select clothing stores", "charitable organizations", and "drugstores".
You can also try to leverage "rotating category" cards. Like pick your own category cards, these cards sometimes cover more unusual categories and there is a quarterly bonus rewards spending cap. But instead of getting to choose your own bonus categories, the credit card company decides the bonus categories for each quarter. Lua error in Module:Link at line 366: attempt to index field '?' (a nil value)..
Step 3: Use the Altitude Reserve when it make sense
The Altitude Reserve earns 4.5% on any digital wallet purchase. Apple Pay, Google Pay, etc. can be used in many physical stores, apps, and websites. If you have the right Samsung device, you can use Samsung pay at any credit card terminal that accepts swipes, allowing you to earn 4.5% at many physical locations.
Assuming you can get approved (try to apply before you receive too many other new cards), you can use the Altitude Reserve, whenever you can use a digital wallet and you aren't already earning more valuable rewards with another card. For example, with the right card, you can always do better than the Altitude Reserve at gas stations. If you value Ultimate Reward points, you can always do better at restaurants with the Sapphire Reserve card. But, if you want to restrict yourself to cash back cards, the Altitude Reserve is the best option for restaurants where you can use your digital wallet. And the Altitude Reserve is your only good option for many retail stores.
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